What was the State of Deference at the Enactment of the APA? (10/7/24)

I am presently writing an article I hope to publish to SSRN later this week. In that article, I include a discussion of Skidmore v. Swift & Co., 323 U.S. 134 (1944) which may have taken on new life as a result of the demise of deference from Loper Bright Ent. v. Raimondo, 603 U.S. ___, 144 S. Ct. 2244 (2024).

One key claim I make in the article is that Loper Bright is wrong in claiming that the cases in the 1940s “cabined” “deferential review to fact-bound determinations.” (144 S.Ct., at 2249.) The reason that the claim is important to the result is that Loper Bright needs to present the state of the law at the time the APA was enacted as not sanctioning deference to agency interpretations of ambiguous statutory text. During the consideration of the APA in 1945 and 1946, the consistent statements of the meaning of APA § 706 [§ 10(e) of the original APA before codification] was that § 706 restated existing law and made no change to the existing scope of judicial review of agency action. For a survey of those consistent statements, see John A. Townsend, The Tax Contribution to Deference and APA § 706 (SSRN 12/14/23 as updated on 10/6/24), here. In fact, the law is clear that deference was the state of the law at the time, as shown by Skidmore itself when read carefully.

Loper Bright gives new emphasis to Skidmore in the statutory interpretation universe, and at least as presented in Loper Bright, Skidmore has no relationship to the Loper Bright claim of no deference at the time the APA was enacted. But, as I present in my new yet-unfinished article, Skidmore confirms that Loper Bright just made up that claim of no deference.

Skidmore was the second of two key Supreme Court decisions stating deference for agency interpretations. The first was Dobson v. Commissioner, 320 U.S. 489 (1943), reh. den., 321 U.S. 231 (1944). Skidmore came in 1944. Justice Robert Jackson authored both unanimous opinions. Justice Jackson was the Supreme Court Justice with the most administrative experience, having served as Chief Counsel of the IRS, Assistant Attorney General for the Tax Division, Solicitor General of the United States, and Attorney General of the United States. He also served on the prestigious Attorney General’s Committee on Administrative Procedure which produced the Final Report 1941 said to be the beginning of the legislative history of the APA (the Final Report 1941 was addressed to him as Attorney General).

In Dobson, the Court addressed the proper scope of review for Tax Court interpretations of law. The Court held that Tax Court interpretations were entitled to deference (although not using that word) unless the statute was “clear cut” (essentially the same as Chevron Step One with the statute having no ambiguity). The Court held that deference was required for two independent reasons. First, the robust agency deference then in the law applied because the statute then made the Tax Court an agency. Second, the statute permitted overturning interpretations of law that were “not in accordance with law,” a standard that the Court held required deference. (Facially, I think the Court was saying that, without a conclusion that the interpretation was not the law (Chevron Step One), the interpretation must be respected; as worded, that meant that, to the extent that the court could not make the affirmative determination that the law was different than the agency interpretation, the agency interpretation prevailed; in other words, if there could be legal interpretive equipoise where the court cannot determine the best interpretation, the agency interpretation prevailed.) It is important to repeat here that Dobson is based both on (i) the state of agency deference at the time because the Tax Court was statutorily an agency and (ii) the "not in accordance with law" statutory review standard.

Then we get to Skidmore decided the next year. I offer the details of Skidmore because it speaks approvingly to deference to agency interpretations in interpretive regulations. Many think Skidmore deals only with respect to be accorded agency interpretations to the extent the interpretations are persuasive. Skidmore surely does that. But Skidmore also affirmed traditional deference to agency interpretive regulations. Rather than recreate the discussion, I just copy and paste the discussion of Skidmore in my current working draft of the article:

Skidmore was a suit was between employees and employer. The Administrator of the Wage and Hour Division, U.S. Department of Labor filed an amicus brief in the Supreme Court. The question was whether certain required standby on-premises time where the employees did nonworking activity (sleeping, eating, and playing games with rare interruption of these normal nonworking activities) was working time for compensation purposes. The Administrator had previously issued subregulatory guidance setting forth factors to consider in making a “conclusion” on the working time issue. In the amicus brief, the Administrator advised the Court of his “conclusion” that some of the nonworking activity was working time and some was not. The “conclusion” from applying the guidance factors, the Court said (323 U.S., at 136-137) is “a question of fact to be resolved by appropriate findings of the trial court.” Skidmore did not hold or suggest that the Court’s earlier pronouncements on deference to interpretations of law no longer applied. Indeed, Skidmore assumed that the prior deference holdings were so well known to all, that the Court need only state their holdings broadly without citation (323 U.S., at 140): “This Court has long given considerable and in some cases decisive weight to Treasury Decisions and to interpretative regulations of the Treasury and of other bodies that were not of adversary origin.” The fact that Justice Jackson felt no need to cite authority for the clear statement of deference shows that he, for the Court, thought deference was common knowledge. (Dobson covers some of these prior holdings as does the Final Report 1941.) In this vein, the key Skidmore holding is (323 U.S., 140):

We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.

In other words, when agency interpretation is not entitled to deference (“not controlling” contrasting with Treasury interpretive regulation), still the agency’s “conclusions” in subregulatory guidance (here the Administrator’s amicus brief) may be considered in determining whether the conclusion is persuasive in the interpretation of the statute.

Now to conclude, I suspect that those steeped in deference and Loper Bright can see where this is going. Despite Loper Bright’s claim of no deference prior to the APA, in fact deference was alive and well and was the state of the law when the APA was enacted. The consistent statements in the consideration and enactment of the APA were that the scope of review provision APA § 706 [original § 10(e)] merely restated existing law means that deference was incorporated into the APA. The mere fact that Loper Bright claimed otherwise does not make it so.

And, there is more, specifically the incorporation into § 706(2)(A) of the requirement that, in order to hold unlawful and set aside agency action, the reviewing court had to find the agency action “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Dobson just three years prior to the APA held that the “not in accordance with law” standard required deference. That’s another part of the article, but I wanted to present here a more nuanced discussion of Skidmore than I have seen before.